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What Makes a “Wrongful Employment Practice”, and the Necessity of EPLI

March 15, 2019

In the last couple of years, the United States has moved into the #MeToo era, which has seen a sharp rise in sexual harassment cases brought against industry leaders and company heads. This is an encouraging step for people who feel they have been mistreated and disrespect in some way, but it’s also brought about false claims against people who have not done anything wrong, which has in turn brought up separate lawsuits of wrongful termination.

In the first 12 months following the breakout of #MeToo in October 2017, more than 450 people had cases brought against them for sexual harassment alone—that’s more than one per day, on average. So, with the number of lawsuits still high from employees against their employers, it’s plain to see no company is immune to allegations, no matter the size or industry. Having certain kinds of business insurance in place, including specialized EPLI coverage, can help protect a company and those included through costly legal issues.

Here’s some more information on what make a wrongful employment practice and why EPLI insurance is necessary.

Wrongful Termination or Employment Practices

An employee who has been fired due to allegations can turn around and sue if they feel they’ve been wrongfully terminated. If certain allegations arise against an employee, such as sexual harassment, they can plead their case against the person who made the allegation as well as the company.

What’s more, employees who feel they have been wrongfully terminated because or race, sexual orientation, or a host of other personal matters can easily make their case that they were let go because of those matters if there is no substantial evidence of other wrongdoing.

And when it comes to retaliation, former employers can sue a company because they were let go due to the prospect of them detailing a company culture of harassment. For example, if an employee brings up issues related to harassment from executives in the company toward employees, and they are fired because of it, they have a case to bring against that company.

The Importance of EPLI Coverage

Employment practices liability insurance, or EPLI, is a specialized piece of coverage that protects company when lawsuits from former employers are sought after. EPLI helps companies in the middle of legal battles with former employees who were wrongfully terminated for a number of reasons.

EPLI supplies financial help to companies and helps with resources needed to defend against a lawsuit or to pay for a claim. A company may have felt it necessary to fire an employee who was carrying allegations of misconduct, but who was actually innocent. This puts the company in the crosshairs of legal trouble, and it helps to have the right coverage to protect their assets as well as reputation of a place to work or do business with.

The cost of EPLI coverage can vary by industry or employee size, as well as other risks like claim history for a company and written policies. The coverage can cover legal costs, as mentioned, as well as pay damages to the injured party, if the lawsuit ends up in their favor.

About Associations Liability Insurance Agency (ALIA)

The ALIA Team (part of the Riverton Insurance Agency Corporation), specializes in helping real estate professionals find the affordable and comprehensive coverage they need, without the hassle. ALIA dates its roots to 1991 with the founding of FREA, Foundation of Real Estate Associates. In 2013, ALIA was created to work with multiple insurance companies thereby broadening the portfolio of products to customers. In 2017, ALIA was purchased by Riverton Insurance Agency Corp.